The UK Chancellor of the Exchequer’s announced £5bn windfall tax on oil and gas companies would undermine investment in offshore wind, according to the Offshore Energies UK (OEUK) association.
OEUK chief executive Deirdre Michie (pictured) said investor confidence depended on taxes being predictable, “so the introduction of a new one, without any consultation, would undermine investment in offshore wind and other low-carbon energies – whose expansion was another key element of last month’s strategy”.
Michie was responding to chancellor Rishi Sunak’s statement in the House of Commons earlier today where he announced that, under the levy, the industry would have to pay £5bn in new taxes this year.
Those taxes are in addition to the £7.8bn the UK offshore oil and gas operators are due to pay this year.
She said the government had opposed calls for a windfall tax, so today’s announcement has “disappointed the industry, undermined trust and created long-lasting uncertainty over future investment”.
In response to the chancellor’s statement in the House of Commons this afternoon, a Shell spokesperson told reNEWS: “We have consistently emphasised the importance of a stable environment for long term investment.
“This is fundamental to our aim to invest between £20-25bn in the UK in the next decade, mostly in low and zero carbon products and services, with a significant amount also focused on ensuring security of energy supply for the UK.
“The chancellor’s proposed tax relief on investments in Britain’s energy future is a critical principle in the new levy.
“We recognise the burden that increased energy prices have across society, in particular on the vulnerable, and have hardship plans in place to help our customers.”
The windfall tax was announced as part of a £15bn package of measures to support households struggling with the cost of living crisis, due to rising energy costs and inflation.
RenewableUK CEO Dan McGrail said: “The best way to help consumers is to invest in renewables which are our cheapest sources of new power.”
He said the industry is investing more than £100bn over the course of this decade in new energy sources which will cut our dependence on gas, which is the root cause of rocketing bills.
McGrail added: “Anything which might deter or slow down investment in renewables would be a retrograde step at a time when Government has just set out an energy security strategy which aims to accelerate the transition to clean power.”